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69. Machine costs $150,000, and lasts 10 years with salvage value of $15,000. Annual operating costs...

69. Machine costs $150,000, and lasts 10 years with salvage value of $15,000. Annual operating costs are $50,000. If you want to make a 20% return on investment, what is the minimum annual revenue required from this machine? Show all work for full credit.

Expert Solution

Rate of return (r) = 20%

We can compute the Minimum annual revenue(A) to earn return of 20% with following equation:

where,

n = life of machine in years

Thus, Minimum Annual revenue required is $85,200.57

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

jeff jeffy answered 9 months ago

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